Abstract

Purpose - The purpose of the study is to explore the logistic distribution network design of order fulfillment in online fashion retail. In order to fulfil the purpose, it has been divided into two research questions:

• -  How is the current logistics distribution network in Europe designed at H&M Online?

• -  How should the distribution network be designed in the US market to reach a high

  order fulfillment at H&M Online?

Method - In order to fulfil the purpose, a case study has been conducted. A theoretical framework has continuously been built up while collecting empirical data from the case company. The empirical data consists of internal documents, information from unstructured and unstandardized interviews, as well as historical sales data from the company's online business. The case company has been chosen based on its characteristic as a global e-retailer in the fashion industry. In the analysis, the empirics has been compared to the theoretical framework and a result has been generated.

Results - In the first research question, a framework for the company's European market has been identified. The framework raises several success factors, including; virtual pooling, geographic and availability strategy. Furthermore, these success factors have been analysed in order to apply them to the US market.

During the work with the second research question, historical sales statistics have been linked to demographics and geographical conditions in order to design a well-structured logistic distribution network.

Implications - The essay notes that there is a lack of theoretical models on how online companies can create a higher degree of availability. The result of this study shows that there is a clear connection to current research with regard to order fulfillment, such as the theoretical implication.

The practical benefit presented by the paper provides an overall picture of how companies can work to offer higher availability, quality and deliveries to achieve a high level of customer satisfaction. Furthermore, the importance of a well-functioning virtual pooling is presented.

Limitations - Since only one case company has been included in the study as well as the qualitative approach, the result is closely linked to the case company. Through the theoretical framework, we have captured a broad perspective which reinforces the relevance of the study. If additional case companies were included in the study, results would have become more generalizable and increased reliability.

Keyword - Availability, virtual pooling, order fulfillment, logistic distribution network, allocation, stock balancing, fulfillment, stock setup, logistics service quality.